Gold touched $440.25 per ounce on Tuesday in Europe, scoring a new 16-1/4 year high for the third day running, with the market poised for more gains. Expectations of further dollar weakness amid worries over the US current account gap were seen taking bullion to $445, ahead of $450, as a falling US currency strengthened the metal's appeal for non-US investors. "Gold's made a second charge for the $440 level, if it can get through there we're probably looking at $445 but there's quite a bit of resistance," a dealer said.
Spot gold was at $439.95/440.70 by 1542 GMT, up from New York's late quote on Monday of $436.45/437.20.
Analysts and traders said expectations of further inflows of demand with the imminent release of a new exchange-traded gold fund in New York were also enhancing gold's allure.
Investors and speculators had filled their boots in the latest rally, with the latest CFTC Commitments of Traders report showing a net long position on the New York futures market near the all-time high set earlier in the year.
"This should limit the outperformance by gold of the euro in the near term, although further dollar weakness will see both the euro and gold higher," John Reade, analyst with UBS Investment Bank, said in a report.
The dollar won some relief from mounting selling pressure on Tuesday after a US government report showed an increase in US capital inflows in September.
But that was not enough to remove negative sentiment towards the dollar as many analysts maintained the view that Washington wanted a weaker dollar to curb the burgeoning US current account deficit.
Silver followed gold's move higher, firming to $7.56/7.59 from New York's $7.53/7.56.
Platinum slipped back after several days of buying from Asia as precious metals refiner Johnson Matthey released its key outlook report.
Its Platinum 2004 Interin Review showed the global platinum market was expected to move into surplus for the first time in several years in 2005.
But the metal, used in jewellery and to clean exhaust emissions in autocatalysts, could be in short supply by 40,000 ounces in 2004 due to a reduced South African supply forecast, JM said, reversing its forecast in May of a possible surplus.
Spot platinum was at $864.00/869.00 from $874.00/$879.00 previously.
Palladium rose slightly to $216.00/220.00 from $214.50/220.50.